By Rachel Dally-Watkins
21 April, 2015
EVOLUTION Mining is set to become Australia’s third biggest gold producer with the $300 million acquisition of La Mancha Group International’s Australian assets.
On 20 April Evolution announced it had entered a binding agreement to acquire the high-grade Frog’s Leg underground gold mine, the adjacent White Foil open-pit gold mine and the 1.5 million tonne per annum carbon in leach processing plant, all close to Kalgoorlie in WA.
The acquisitions boast combined production of between 130,000oz and 160,000oz of gold per annum, at an all-in sustaining cost of between $950 and $1000 per ounce. This would take Evolution’s total annual production to between 530,000oz and 600,000oz of gold at an all-in sustaining cost of between $960/oz and $1030/oz.
Once the transaction is approved by the Foreign Investment Review Board, La Mancha will receive 322 million new fully-paid Evolution shares, giving it a 31 per cent holding in the company.
Evolution stated that, in addition to becoming its largest shareholder, La Mancha would also become a long-term strategic partner.
As part of its “commitment to this strategic partnership”, La Mancha would provide Evolution with an initial in-principle commitment of up to $100 million of additional capital to assist in funding further growth opportunities.
“This transaction is a major step towards realising Evolution’s long-standing goal of creating a globally relevant Australian-focused gold producer,” Evolution executive chairman Jake Klein said.
“The La Mancha Australia assets are an excellent addition to our existing portfolio, and exactly the type of high-quality, low-cost producing assets that we have been seeking to acquire. They are also located in a highly prospective and strategically important region of Australia that offers significant upside exploration potential.
“This transaction not only delivers a high quality asset into our portfolio but also partners us with a long term strategic shareholder who shares our vision – there can be no better evidence of this than La Mancha’s in-principle commitment to invest a further $100 million to support our future growth.”
Evolution expected the transaction to be completed in July.